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Fidelity Offering Bitcoin in 401(k) Plans
Summary: Fidelity Investments, the nation’s largest retirement plan provider, announced on Tuesday the release of their Fidelity’s workplace Digital Assets Account (DAA), allowing users to invest a portion of their retirement savings into Bitcoin through the core 401(k) plan investment lineup. “There is growing interest from plan sponsors for vehicles that enable them to provide their ...
Fidelity Investments, the nation’s largest retirement plan provider, announced on Tuesday the release of their Fidelity’s workplace Digital Assets Account (DAA), allowing users to invest a portion of their retirement savings into Bitcoin through the core 401(k) plan investment lineup.
“There is growing interest from plan sponsors for vehicles that enable them to provide their employees access to digital assets in defined contribution plans, and in turn from individuals with an appetite to incorporate cryptocurrencies into their long-term investment strategies,” said Dave Gray, head of workplace retirement offerings and platforms at Fidelity Investments.
The crypto offering will be available for 23,000 employers that use Fidelity to administer their retirement accounts by the middle of this year. MicroStrategy, an application software vendor, plans to be the first employer to leverage this new product for their employees.
“MicroStrategy looks forward to working with Fidelity to become the first public company to offer their employees the option to invest in Bitcoin as part of our 401(k) program,” said Michael Saylor, Chairman and CEO of MicroStrategy.
Fidelity’s announcement comes as more firms are jumping into the digital space. According to Fidelity, 30% of U.S. institutional investors they surveyed said they would prefer to buy an investment product containing digital assets. In addition, they estimate that roughly 80 million U.S. investors currently hold or have held digital currencies, making it crucial for Fidelity to roll out this new program.
The investment firm with $11.3 trillion in assets under management explained their new DAA is “a custom plan account that holds Bitcoin and short-term money market investments to provide the liquidity needed for the account to facilitate daily transactions on behalf of the investor.”
The Bitcoin in the DAA will be held on the Fidelity Digital Assets custody platform for maximum security. Fidelity believes that employers and employees will be able to stay ahead of the curve with a retirement plan that features Bitcoin.
While Fidelity and plan sponsors are excited over the news, regulators have wanted against featuring cryptocurrencies in 401ks, citing speculation and volatility as their main concerns.
Author: Tyler Irvin
Tags: Bitcoin,Fidelity Investments
Link: Fidelity Offering Bitcoin in 401(k) Plans [Copy]
